Small Chance for South Africa to Break Even on World Cup Investment

South Africa has very slim chances of breaking even on its investment in the World Cup, according to a report from Human Sciences Research Council executive director of the Centre for Service Delivery research programme Dr Udesh Pillay. The best-case scenario would see a modest 0.5% increase to the country's GDP. But large defecits are expected to occur.

The country's expenditure on the event has been R63-billion ($8.5 billion USD), which is 6,4% of the 2010/11 gross domestic product (GDP). Currently, the only known revenue is R2-billion ($270 million USD) from FIFA and it is estimated that the event's contribution to the GDP will be 0,5%.

Taking these figures into account, Pillay says that the best-case scenario deficit that South Africa will experience is R26,1-billion ($3.5 billion USD), while the worst-case scenario deficit will be R56,1-billion ($7.5 billion USD). But these figures do not take ticket sales, marketing and merchandising into account.

He estimates that ticket sales, marketing and merchandising could add up to a total of about R20-billion, therefore it could be possible to break even in a best-case scenario, but there is a current possible conundrum. There are a total of 3,2-million tickets available for the event. To date, local supporters have bought about 350 000 tickets, or 11%, of these, resulting in 2,8-million remaining tickets.

SA may just break even on 2010 World Cup, research shows
Engineering News
March 19, 2010